The name may be in use as a brand, rather than a company name. Or the other company may not be registered because it's a sole trader or partnership. If you try to trade under the name, particularly in the same industry, you run the risk of being sued by the other company. Also, think how you would feel if you'd started a company then someone came along and set up with the same name. It's a fairly shitty thing to do.

It's not a copyright or company name issue so much as a trade mark issue. Whether or not the other company has a registered trade mark, they may have accrued unregistered trade mark rights in the name (unregistered rights are protected under the common law of passing off in England).

Even if you can register the name as your company name, you may sooner or later fall foul of the other company if they believe you are infringing their trade mark rights and/or the goodwill they have accrued in the name (which is what is protected under passing off).

You should check the Trade Marks Register on the Property Office's website as well as on the website (OHIM has the register of Community Trade Marks, which give rights in the UK as well as throughout the EU). Enter the trade mark name in the box that says 'Trade mark name'.

Even if the name you like is not registered, that does not mean that you can use it safely, because of unregistered rights. If a Google search reveals another business using the name already to sell similar or the same products, you should pick another name. The fact that it is your own name will not assist you if the earlier user has accrued rights in it already. There was a big case on this point involving the name Alexander McQueen.

As an intellectual property lawyer I always advise clients that it is best to pick a name for their business which they have no reason to believe anyone else is using in the territory (i.e. England, USA, France) for the same or similar goods or services. Also the name should be distinctive and not descriptive, e.g. 'Apple' for computers but not 'ComputersRUs' for computers. The more distinctive the name in relation to the goods/services to which it will be applied, the stronger the mark.